Over 55s Think Pension Guidance Should be Independent from Pension Providers

Four in five (83%) of the over 55s think a pension guidance guarantee should be impartial and independent from any pension provider

Nearly a quarter (24%) would trust an existing organisation like The Pensions Advisory Service (TPAS) to provide the service

More than one in five would also trust professional financial advisers (23%)

New insight[1] from MGM Advantage, the retirement income specialist, shows 83% of the over 55s think a guidance service should be impartial and independent from pension providers. Only 5% thought impartiality wasn't an important characteristic while 12% didn't know.

The research among people with a pension and aged 55+ also reveals trust could play a large part in the success of the guidance guarantee.

When asked who people would trust to provide a guidance service that helped them understand pension options when they retire, existing organisations like Citizens Advice Bureau or TPAS proved the most trustworthy, according to the over 55s. Following closely behind were professional financial advisers (23%), or potentially a new government agency (21%). 21% said they preferred a new independent financial organisation to be set up to provide the service.

Only 12% of respondents suggested they thought they could trust their existing pension company to provide such a service.

MGM's research among people of all ages who were saving into a pension mirrored the findings of those approaching retirement.

Andrew Tully, Pensions Technical Director, MGM Advantage commented: 'As the industry debates the pros and cons of the new guidance service, it seems trust will be crucial in making it work effectively. What comes across strongly is the overwhelming number of people from all age groups who thought the service should be impartial and independent from pension providers. This is important because we are building a service not only for the retirees of today but also for future generations.

'While guidance can help understanding and narrow down options, it is also crucial there is a clear hand-off to financial advisers when necessary.'

Michelle Cracknell, Chief Executive, The Pensions Advisory Service said: 'The guidance service being launched as part of the Budget is a big opportunity for us to win over the "hearts & minds" of people so that they become more engaged in planning for their retirement. We know from our helpline that people struggle with retirement decisions. An independent organisation like TPAS provides a great bridge between people receiving information from their providers and the next steps that they need to make, which may include finding a financial adviser.'

Notes to editors

Source: All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,367 adults. Fieldwork was undertaken between 4th - 5th June 2014. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). 383 respondents were aged 55+, with a pension, and yet to retire.

MGM Advantage is a retirement income specialist, innovating, growing rapidly and working hard to make the most of people's money in retirement. From offices in London and Sussex, the provider sells its products through financial advisers.

The company attracted the backing of private equity investors TDR Capital, with the deal concluding in late 2013. This resulted in the creation of a new life company using the MGM Advantage brand, and resulted in a split from the mutual society (Marine and General Mutual). The strategy set out in 2008, to focus on the retirement income market, is retained.

MGM Advantage's market leading products include an investment-linked annuity, the Flexible Income Annuity, the first retirement income product to be rated five stars by Moneyfacts. This gives customers the flexibility to change income levels at different stages of retirement and the potential for growth and therefore, the potential to negate the impact of inflation. It also provides a minimum income guarantee and death benefits. Enhanced rates are also available for the Flexible Income Annuity.

MGM Advantage also specialises in providing enhanced annuities designed to provide additional income in retirement for people with health conditions, a poor medical history, or lifestyle conditions, for example smoking.

Through new product innovation and development MGM Advantage is always looking to find ways in which its customers can improve their retirement income, and encourages people approaching retirement to shop around for the best annuity.

MGM Advantage is part of a group of companies owned by ICE Acquisitions SARL (ICE Group). This group of companies includes the new life company (MGM Advantage) and a service company (MGM Advantage Services Limited). MGM Advantage manages assets in excess of £1.4bn (as at December 2013).